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Investors Are Looking for AI Stocks Thought to Have More Upside

• Nvidia shares and the broader market declined on Thursday despite the AI chip giant's better-than-expected quarterly earnings report.
• Market watchers posited that, after years of posting consistently strong quarters, Nvidia stock has lost some of its luster among investors looking for stocks thought to have more upside.

Another huge beat from AI bellwether Nvidia. Another big shrug on Wall Street.

Nvidia (NVDA), America’s top stock, on Wednesday reported a blockbuster fiscal first quarter fueled by booming AI demand. Yet shares were down about 2% in midday trading Thursday as the major stock indexes slid. 

“With a pretty muted initial post-market reaction, it once again seems the market demands perfect from the largest company in the world,” said Ryan Lee, senior vice president of product and strategy at Direxion. Rather, Nvidia’s undeniably strong print “seems to be enough to keep the name relatively flat.”

Nvidia, as the biggest beneficiary of the AI data center boom, was once the driving force behind the AI rally that's fueled stock gains for the past three years. But investors appeared unimpressed by its strong earnings report Wednesday, suggesting the stock's dominance in the AI trade is waning.

Nvidia topped expectations across the board on Wednesday, and reported its profit margins, a key concern heading into the results, held steady. “Another beat and raise but not a surprise to the market,” wrote HSBC analysts on Thursday. 

“This report was not a simple green light or red light,” said Jack Behan, head of capital markets at Direxion. “It was a reminder that the AI trade is evolving from a straight-line momentum move into a more tactical trade.” 

Nvidia’s quarterly report has been a must-watch event on Wall Street since early 2023 when surging demand for its advanced chips caused its revenue to skyrocket. Sales have continued to grow at a blistering pace, but the stock has failed to keep up this year. 

After years in the limelight, Nvidia “seems to no longer be viewed as the market’s AI darling,” said Lee. Heading into Wednesday’s results, Nvidia shares were up 20% since the start of the year, more than twice the return of the S&P 500 but well short of market’s favorite AI stocks. This year, shares of memory device maker Sandisk (SNDK) are up 500%, Intel (INTC) stock has tripled in value, and Nvidia competitor Advanced Micro Devices (AMD) has doubled. 

Investors’ preference for new AI stocks with momentum was visible on Thursday. As tech stocks slid, memory stocks like Micron (MU), Western Digital (WDC) and Seagate Technology (STX) were all up more than 2%. Networking equipment providers Ciena (CIEN) and Corning (GLW), freshly minted AI plays, were up more than 4% each.

“In past quarters, it perhaps felt like Nvidia was the only talking point in the market,” Will Rhind, CEO of GraniteShares, told CNBC Thursday morning. “This time around there’s way more news for investors with SpaceX, with Anthropic, OpenAI. All sorts of other AI stories,” Rhind said.  

Nvidia’s dominance within the AI trade may be further challenged by the entrance of a new cohort of shiny AI plays. Elon Musk’s SpaceX on Wednesday filed to go public in what’s likely to be the largest IPO in history. ChatGPT-maker OpenAI is also reportedly aiming to file confidential IPO paperwork in the coming weeks in the hopes of debuting on public markets by September. OpenAI's main competitor, Anthropic, is also reportedly targeting an IPO in the fall. 

Some market watchers even suspect that Nvidia could soon lose its virtual monopoly in the AI accelerator business. Nvidia stock's low valuation relative to peers is a sign "the market knows something," said John Blank, chief equity strategist at Zacks, on Thursday. "The next stage of this buildout may be anti-Nvidia, because people are gonna want to put those margins on their own books, not leave them with Nvidia."

• Shares of big bitcoin buyer Strategy have recovered recently, edging out the S&P 500 year-to-date—and outperforming bitcoin itself.
• The price of bitcoin is hovering around $77,000, down about 12% so far this year. Strategy's Michael Saylor predicts a rally.

One bitcoin whale sees a rally coming.

Michael Saylor, executive chair of Strategy (MSTR) and one of bitcoin's most high-profile backers, said prices bottomed around $60,000—they came within a few hundred bucks of that level in February, perhaps the chilliest part of the recent "crypto winter," according to Messari—and that the market is moving into a "spring phase."

"We'll rally from here," Saylor said in an interview with CNBC Thursday. Bitcoin, he said, "going up forever."

Strategy chair Saylor has long held a bullish stance on bitcoin, but he also recently pivoted the company's buy-and-hold strategy, saying the bitcoin treasury firm may sell the cryptocurrency.

The leading cryptocurrency, which according to CoinMarketCap has a market value of about $1.54 trillion, has has regained ground lost after sliding from its all-time high in October. More recently, it has struggled to stay above $80,000 and has been hovering under that mark. Net spot bitcoin ETF flows, one of the bigger drivers of the coin's price lately, have been negative for four consecutive business days through yesterday, with roughly $1.3 billion of capital rushing out, according to Farside Investors data.

Saylor said he expects Strategy's stock—the company holds bitcoin, has a software business and offers a range of financial products—to "outperform bitcoin." That's been the case this year, with the stock up 10% through Wednesday's close, ahead of the S&P 500's 7% rise. Bitcoin is down 12% over the same period.

Saylor said macroeconomic tailwinds include the passage of the Clarity Act. The bill, which sets up a regulatory framework for digital assets, last week took an incremental step toward becoming law as the Senate moved a draft version out of committee. The development initially drove prices above $80,000. Saylor said the Securities and Exchange Commission's so-called "innovation exemption" for tokenized stocks could also help; the agency is moving toward allowing the trading of tokenized assets on decentralized crypto platforms, according to Bloomberg.

Strategy stock and bitcoin are roughly flat Thursday.

The summer trading holiday schedule starts Monday with a break for U.S. markets.

Stock and bond markets will be closed on Monday, May 25, for Memorial Day. Bond markets will close early, at 2 p.m. ET, on Friday, May 22.

As for the rest of the summer schedule:

• Stock and bond markets will close on Friday, June 19, in observation of Juneteenth.
• Stock and bond markets will close on Friday, July 3, in observation of Independence Day. Bond markets will close early, at 2 p.m. ET, on Thursday, July 2.
• Stock and bond markets will close on Monday, September 7, in observation of Labor Day.

After Labor Day, the next stock-market holiday doesn't come until Thanksgiving, though the bond market will take breaks before that.

• Nvidia posted record sales that topped Wall Street estimates, but the stock was little changed and slightly lower in the wake of the results.
• Analysts said the chipmaker faced a particularly high bar to impress, after the tech sector's recent rally that sent Nvidia and other stocks to record highs.

Nvidia delivered another blockbuster quarter with earnings that topped Wall Street projections. So why isn't the stock getting a boost?

Shares of Nvidia (NVDA) were down less than 1% in recent trading, despite record sales from the AI chipmaker as data center revenues nearly doubled from a year ago. Several analysts pointed to a record rally and rising expectations heading into the results that may have made it harder for the chipmaker to impress.

Morgan Stanley analysts, who lifted their price target to $288 from $285 following the results, told clients they would view the muted reaction as an opportunity, considering Nvidia an "unassailable" industry leader and "best value" pick that still has room for growth.

Shares of Nvidia and a number of other tech stocks have rallied to record highs in recent weeks after a string of solid reports on strong AI demand. That rally may have left many investors wondering if Nvidia's stock still has room to rise.

Jefferies analysts said that considering Nvidia's growth and forecasts, the chipmaker's stock "continues to look remarkably cheap the more it grows but for now investors seem focused elsewhere."

Investors have been difficult to impress this quarter, as a number of market heavyweights have beaten estimates and not seen their stocks rewarded as much as they normally would be.

Shares of Nvidia have been big gainers in 2026, outperforming the tech-focused Nasdaq 100 and the S&P 500 by substantial margins. Up about 20% year-to-date, the only Magnificent 7 stock to post better performance so far has been Alphabet (GOOGL), Google's parent company.

News of the day for May 21, 2026

Stocks are pointing to a slightly lower open Thursday as investors assess earnings reports from Nvidia and Walmart and react to the latest headlines out of Iran; Nvidia shares are little-changed after the AI chipmaker reported strong first-quarter results last night; Walmart shares are losing ground after the retail giant issued a disappointing outlook; SpaceX's prospectus was made public last night ahead of its planned IPO in the coming weeks; and Intuit shares are tumbling despite a solid earnings report as the TurboTax maker also announced big layoff plans. Here's what you need to know today.

Stock futures are lower this morning as investors digest quarterly results from Dow Jones Industrial Average components Nvidia (NVDA) and Walmart (WMT) (See more below on each of those companies). Futures tied to the Dow and the S&P 500 were recently down 0.2% and 0.3%, respectively, while futures linked to the tech-heavy Nasdaq fell 0.5%. The major indexes closed sharply higher on Wednesday as tech stocks rebounded from losses earlier in the week.

After falling sharply yesterday, WTI crude oil futures, the U.S. benchmark, were up more than 2% at $100.50 per barrel. The move higher followed a report from Reuters that said Iranian officials are pushing to keep Iran's enriched uranium as part of any deal to end the war, while the U.S. wants the uranium out of the country.

Gold futures ticked lower to around $4,515 this morning, while bitcoin was at $77,100, down from an overnight high above $78,000. The yield on the 10-year Treasury rose to 4.62% from 4.59% at yesterday's close, but remains below the 16-month high of 4.67% it hit on Tuesday.

Nvidia beat Wall Street estimates in its latest quarterly results last night, but the results weren't impressive enough to give the stock a lift this morning. The market's most valuable company reported a record $81.8 billion in revenue and adjusted earnings per share of $1.87 for the first quarter, each better than what analysts had expected, tech giants continue to spend big on the hardware needed to build AI data centers. With the AI chipmaking giant's shares hitting a record high last week as tech stocks rallied ahead of the results, expectations may have been too high for a strong report to keep the rally going. Nvidia shares were down 0.2% in recent premarket trading.

Walmart (WMT) shares are down following the retail giant's latest quarterly earnings report. Walmart reported revenue of $177.8 billion, better than analysts had forecast, but its adjusted earnings of 66 cents per share merely met estimates. Walmart's second-quarter forecasts were slightly below what analysts had called for, and the retailer also held its full-year forecasts steady. Analysts said ahead of the report that Walmart would likely keep its forecasts in place amid uncertainty and inflation caused by the Iran war, but analysts also said Walmart could benefit from that uncertainty as Americans look to stores like Walmart to make the most out of their budgets. Shares were down more than 2% ahead of the opening bell.

One of this year's most anticipated stock market debuts is officially on the way. SpaceX filed its initial public offering prospectus last night, giving investors their first look at the space exploration, AI and social media company's finances. The filing showed that SpaceX generated $18.67 billion in revenue last year, while recording a net loss of $4.94 billion. SpaceX makes money from contracts for government and commercial rocket launches, selling access to its Starlink satellite internet service, and from subscriptions to xAI's Grok chatbot and the social media platform X, formerly known as Twitter. SpaceX said it will list on the Nasdaq under the "SPCX" ticker, with the debut expected to be the largest of all time in terms of both market cap and proceeds generated.

Shares of Intuit (INTU) are sinking after the TurboTax and QuickBooks parent posted better-than-expected fiscal third-quarter earnings and announced big layoff plans. Intuit said after the bell yesterday it earned an adjusted $12.80 per share, 25 cents ahead of the analyst consensus, on $8.56 billion in revenue, which was roughly in line with estimates compiled by Visible Alpha. Intuit's fiscal third quarter is the company's largest in terms of revenue, as it includes the April tax season. Intuit on Thursday also announced plans to cut about 17% of its workforce to reduce management layers and focus spending on Intuit's "primary growth engines." Intuit shares were down 15% recently.

Elon Musk Aims for Massive New Markets on the 'Moon, Mars, and Beyond'

• SpaceX is poised to list as soon as next month under the ticker "SPCX" on the Nasdaq exchange; while the pricing of the offering will come later, it is widely expected to be the biggest IPO in history.
• The company's IPO filing shows that it is losing almost as much money as it generates in revenue.

SpaceX is ready to launch... what is expected to be the biggest IPO of all time.

The imminent public trading debut of the company, formally known as Space Exploration Technologies, wraps together many of CEO Elon Musk's ambitions. Among them: build a massive chip factory, colonize mars and raise more money than any other startup in history.

"We believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial industries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond," the company said in its S-1 filing with the Securities and Exchange Commission.

What has yet to be confirmed is its target valuation, which has been reported at around $1.75 trillion to $2 trillion, and how much fresh capital it would raise, which is said to be around $80 billion or more, surpassing current IPO record-holder Saudi Aramco, even after adjusting for inflation.

SpaceX's mega IPO arrives at a moment when hot new issues are landing with investors—as witnessed in big first-day pops and a spate of freshly launched space funds.

Investors who aren't even interested in picking up SpaceX's shares are likely to be unintentional shareholders, because major index providers have recently changed the rules or are in the middle of changing them to fast-track mega-IPOs like it into indices such as the S&P 500.

Details around SpaceX's offering have been reported in dribs and drabs in the last few months, some of which are now available in its IPO paperwork made public on Wednesday.

SpaceX, which includes Musk's artificial intelligence startup x.AI and X, formerly known as Twitter, will list under the symbol "SPCX" on the Nasdaq exchange, according to the company's IPO filings.

The details investors were particularly keen to see involve the company's financial performance. SpaceX generated $4.69 billion in revenue in the first quarter and posted a loss of almost as much, or nearly $4.28 billion. For all of 2025, the company pulled in $18.67 billion in revenue, and turned a loss of $4.94 billion.

The company separates the business into three segments: space, which is the rocket business; connectivity, which covers satellite internet provider Starlink; and AI, which includes AI model grok, as well as X. Of the three, SpaceX's connectivity revenue and income were substantially higher in the March quarter than the other two.

The arrival of SpaceX's paperwork would suggest a listing is mere weeks away, a faster-than-expected timeline than previous reports saying that it was targeted for late June, around Musk's 55th birthday on June 28.

• "A majority" of the Fed's monetary policy committee at its most recent meeting said the Fed would have to raise interest rates if inflation persists above the central bank's 2% goal.
• The Fed is attempting to wrangle inflation that's been over 2% since 2021 and has recently been exacerbated by the Iran war, which has pushed up gasoline prices.

The nation's central bankers are losing patience waiting for inflation to fall on its own.

Behind closed doors as in public, Fed officials have been warning they may have to raise borrowing costs to wrestle inflation down to the Fed's goal of a 2% annual rate, according to minutes released Wednesday of the Fed's most recent meeting last month.

"A majority of participants" said "some policy firming would likely become appropriate if inflation were to continue to run persistently above 2%," the minutes showed.

Higher interest rates could put downward pressure on inflation, with the tradeoff of potentially damaging the job market and economic growth in the short run. Balancing those two concerns is the major challenge of the Fed's monetary policy.

The minutes highlighted the growing pressure the central bank faces as incoming Fed Chair Kevin Warsh takes over. The Fed is responsible for fulfilling a dual mandate from Congress: keeping inflation low and employment high.

Lately, the Fed has been losing its battle against inflation, which jumped to a three-year high in April. The Iran war has pushed up gasoline prices, on the heels of tariffs that have raised prices for many consumer products. Inflation has not run under the 2% goal since 2021.

The minutes shed light on the Fed's most recent meeting, in which the committee voted to hold rates steady. One official dissented from that decision, favoring a rate cut, while three others said the FOMC should have removed language from its post-meeting statement suggesting the central bank's next move would likely be a rate cut.

The fed funds rate influences borrowing costs across all kinds of loans, and the Fed's inflation-fighting playbook calls for raising it if inflation gets too high for too long to discourage borrowing and spending.

Recently, Fed officials have been torn between the need to keep rates higher for longer to combat inflation and to lower them to stabilize the labor market, which suffered from slow job growth last year as tariff-related uncertainty discouraged employers from hiring. The minutes showed inflation is emerging as the top concern, since recent reports on the job market have shown the unemployment rate falling despite low job creation, suggesting the job market has stabilized.

The growing appetite for rate hikes could put the central bank at odds with President Donald Trump, who has demanded rate cuts to boost the economy and lower the interest the U.S. government pays on the national debt. Trump and his administration put outgoing Fed Chair Jerome Powell under pressure to cut rates, but he resisted and insisted on the central bank's independence from direct White House control. Warsh, whom Trump handpicked for the top banker job, has not recently said what he thinks the Fed's next interest rate move should be.

• Surveys show the public opposes data centers, especially when they're built nearby.
• Worker displacement, rising electricity prices, and environmental concerns are among the factors driving opposition.

The data centers powering the AI boom are propping up the country's economic expansion—and surveys show the public overwhelmingly disapproves of them.

A YouGov poll of 6,482 U.S. adults this week found that 47% said data centers had a negative effect on the country, compared with 22% who said they had a positive effect. The rest were undecided or considered the impact neutral. When Gallup asked about building AI data centers "in your area," the opposition was even stronger, with 71% against versus 27% in favor.

The backlash matters because AI investment has been a major driver of the U.S.'s recent economic growth. Morgan Stanley estimated in March that spending on AI software and the hardware that powers it will account for about a quarter of GDP this year, helping offset headwinds from geopolitical events.

The public's hatred of data centers could lead to political action and government restrictions on the technology. The political response is already underway, with lawmakers in at least 14 states, including New York, Virginia, Georgia, and Oklahoma, considering temporary moratoriums.

"Any damage to economic growth from higher oil prices and the tariffs imposed last year has been offset by an investment boom driven by the AI buildout," forecaster Robert Fry said in a commentary this week. Fry also credited tax cuts from the One Big Beautiful Bill Act for helping keep the economy afloat.

Some economists are also counting on AI to make workers more productive, which could raise living standards and ease inflation.

But anger over data centers cuts across the political spectrum, with legislators from New York to Oklahoma looking at bans on their expansion. Across the country, criticisms cluster around several themes. Data centers' electricity needs have pushed up power prices. Residents also say the facilities siphon water from communities that don't have it to spare—about two-thirds of new U.S. data centers built since 2022 are in places already experiencing water stress, according to Bloomberg.

Some data center builders have alleviated power grid issues by constructing on-site power generators, only to replace the electricity concerns with environmental ones. Residents near data centers say those powered by methane gas turbines are polluting homes and schools in the area, most notably around xAI's campuses in South Memphis and Southaven, Mississippi.

Then there's the broader economic fear—that the AI systems many data centers power will displace workers across the economy.

AI industry leaders are sending their own warnings. Speaking at the World Economic Forum in Switzerland earlier this year, Dario Amodei, CEO of Anthropic, the company behind the Claude AI model, predicted the technology could lead to "very high unemployment and very high inequality."

• Space-themed ETFs such as Global X Space Tech, Roundhill Space & Technology, and Tema Space Innovators are concentrated portfolios of companies linked to space development. SpaceX, however, is a feature in just one.
• The stocks in those ETFs, among others, have risen 80%, on average, year-to-date, according to Bespoke Investment Group, edging out the PHLX Semiconductor index over the same period.

Mooning over SpaceX's coming IPO? There are other space-themed investments aimed at the same premise. And they're rising like—well, like rockets.

At least three space ETFs—including Global X Space Tech (ORBX), Roundhill Space & Technology (MARS), and Tema Space Innovators (NASA)—have launched since March. All three members of that trio have logged double-digit gains since, approaching the 18% rise of the PHLX Semiconductor index, the chip benchmark.

SpaceX's hotly anticipated debut appears to be landing at a time when space-themed stocks are going to the moon.

What the ETFs have in common, besides nifty tickers, are concentrated stock portfolios. An analysis of a couple dozen of their holdings byBespoke Investment Group, shows they were shooting the lights out even before the funds launched. Those holdings, the firm's data show, have on average climbed about 80% this year through Monday. (The currently private SpaceX, expected to be the biggest IPO of all time when it lands—which could be soon—isn't in all of them, though the "NASA" fund has a 5% slug of it.)

Across the three space ETFs' holdings are rocket maker Rocket Lab (RKLB) and satellite shop Planet Labs (PL), which have risen 88% and 111% through Monday. There's also Satellogic (SATL), which jumped over 410%; Vishay Precision (VPG), up 173%; and Spire Global (SPIR), ahead 156% over the same time period. None of those companies, according to their respective recent quarterly earnings reports, are profitable in GAAP terms.

Jeff Bezos, Amazon executive chair and founder of private space company Blue Origin, said space tech is "accelerating," citing SpaceX's satellite internet service Starlink as an example.

"I would caution people who think it's all science fiction," he said in an interview with CNBC on Wednesday. "Because it is real, it is happening, and it's probably going to happen faster than most people think."

• Amazon founder Jeff Bezos on Wednesday predicted that AI, by making workers more productive, will eventually lead to labor shortages and even deflation.
• Executives are generally optimistic about AI's potential to stimulate job growth, but the rank-and-file, especially recent college graduates, are increasingly anxious it will have the opposite effect.

AI is going to transform the labor market, but not the way people think, according to Amazon founder Jeff Bezos.

Bezos, in an interview with CNBC on Wednesday, dismissed warnings that AI would replace skilled professionals like radiologists or software engineers. “What’s really gonna happen is it’s gonna elevate all of these people,” said Bezos. “The analogy I give to you is, you’ve been digging out the basement of your house with a shovel and somebody’s about to hand you a bulldozer.”  

Americans are deeply divided in their assessments of AI’s impact on the workplace. Nearly two-thirds of U.S. adults polled in 2024 predicted that AI would lead to fewer jobs over the next 20 years, compared with 39% among AI experts, defined as “individuals whose work or research relates to AI.” Experts were four times as likely as the general public to predict AI will create more jobs than it eliminates (19% vs. 5%).

Throughout history workers have feared permanent displacement by new technologies, only to find that industries adapt and create new jobs in the process. Many tech leaders argue AI is no different. Still, workers and AI skeptics fear displacement by a technology that, unlike the steam engine or lightbulb, is being trained to learn like a human.

Business leaders such as Bezos are overwhelmingly optimistic about the availability of jobs in the AI era. Forty-seven percent of executives and senior human resources professionals said AI use increased entry-level hiring at their firm last year, compared with 13% who said it decreased hiring, according to a recent survey from Strada Education Foundation. Employers were only slightly less optimistic about this year, with 46% predicting an increase in hiring and 17% predicting a decline.

Bezos on Wednesday went as far as predicting the proliferation of AI in workplaces would actually cause a labor shortage. “We’re gonna have so much productivity in our economy that, for example, this is one effect, a lot of people who have two-earner income households, one of the people is gonna drop out of the workforce,” he said. 

AI-driven productivity gains, he said, should allow companies to do more with less, driving down prices in the process. “I predict we’ll actually have deflation,” Bezos said. “Because of the productivity gains, you’re going to be able to afford things.”

Historically, unemployment driven by technological change has tended to be temporary, with displaced workers eventually finding jobs in new fields. According to Goldman Sachs economists, about 60% of U.S. workers are currently in positions that didn’t exist in 1940, suggesting 85% of all employment growth since then may be attributed to jobs birthed by new technologies. Spikes in unemployment stemming from new technologies tend to fade within two years, the economists found.

Still, anxiety about being replaced by AI is growing, especially among younger workers. Eric Schmidt, the former CEO of Google, was booed when he mentioned AI during a commencement speech at the University of Arizona over the weekend. The share of Americans under age 35 saying now is a good time to find a job declined by 27 percentage points between 2023 and 2025 (70% vs. 43%), compared with just 6 points among those aged 55 and up (70% to 64%).

Employment data lends credence to that anxiety. The unemployment rate among recent college graduates increased by 1.5 percentage points between November 2022, when ChatGPT turned generative AI into front-page news, and March 2026. Over that same period, the rate for all young workers ticked up 0.1 percentage point.  

The job market has become particularly difficult for recent college graduates in industries with the greatest AI exposure. Major tech companies have shed tens of thousands of jobs over the past year, frequently citing AI’s impact on productivity and the need to free up cash for AI investments. As of 2024, the most recent data set available, new computer engineering grads were unemployed at a higher rate than fine arts majors (7.8% vs. 7.7%). 

Long-term, Bezos expects AI adoption to streamline drudge work, leaving humans more time to focus on strategy, problem-solving, and creativity. A software engineer’s “real job is gonna be identifying problems and helping to solve them,” rather than writing code line-by-line, he said.

“The work is gonna be done at a higher level,” Bezos said. "It’s gonna be done with a bulldozer instead of a shovel, and that’s gonna be a good thing.”

Business leaders say this is already happening. Forty-two percent of individuals surveyed by Strada said AI tools had increased the analytical and judgment-based responsibilities of entry-level employees, and 33% said it had reduced routine tasks.